Correlation Between W P and Prologis

Can any of the company-specific risk be diversified away by investing in both W P and Prologis at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining W P and Prologis into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between W P Carey and Prologis, you can compare the effects of market volatilities on W P and Prologis and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in W P with a short position of Prologis. Check out your portfolio center. Please also check ongoing floating volatility patterns of W P and Prologis.

Diversification Opportunities for W P and Prologis

-0.02

Correlation Coefficient

W P  Prologis

Good diversification

The 3 months correlation between WPC and Prologis is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding W P Carey and Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prologis and W P is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on W P Carey are associated (or correlated) with Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prologis has no effect on the direction of W P i.e., W P and Prologis go up and down completely randomly.

Pair Corralation between W P and Prologis

Considering the 90-day investment horizon W P Carey is expected to generate 0.81 times more return on investment than Prologis. However, W P Carey is 1.24 times less risky than Prologis. It trades about 0.11 of its potential returns per unit of risk. Prologis is currently generating about -0.03 per unit of risk. If you would invest  6,088  in W P Carey on May 19, 2025 and sell it today you would earn a total of  425.00  from holding W P Carey or generate 6.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

W P Carey  vs.  Prologis

W P Carey

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in W P Carey are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, W P may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Prologis

Risk-Adjusted Performance

Weakest

Over the last 90 days Prologis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Prologis is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with W P and Prologis

The main advantage of trading using opposite W P and Prologis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if W P position performs unexpectedly, Prologis can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Prologis will offset losses from the drop in Prologis' long position.

The idea behind W P Carey and Prologis pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.